Arcos Dorados Holdings Inc. ARCO is scheduled to report third-quarter 2024 results on Nov. 13.

ARCO’s Q3 Estimates

The Zacks Consensus Estimate for earnings is pegged at 16 cents per share, down 46.7% year over year. In the past 30 days, earnings estimates have remained stable. The consensus mark for revenues is pegged at $1.11 billion, down 0.4% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Factors to Note Ahead of ARCO’s Q3 Release

Arcos Dorados’ upcoming quarterly results are likely to be hurt by high costs and weakened consumer demand. The dismal performance in Argentina is likely to have hurt the company’s top line. ARCO continues to invest heavily in its digital and IT infrastructure, including restaurant-level digital tools, which is likely to have increased operational expenses. These investments aim to improve long-term efficiency and customer experience but might have increased short-term costs.

Rising costs in areas such as labor, utilities and IT are likely to have impacted margins across ARCO’s key markets. Mexico, in particular, might have experienced higher payroll expenses due to wage inflation.

Robust comparable sales, expansion efforts as well as strong performance in Brazil and the North Latin America’s divisions bode well. The company is likely to have witnessed positive guest traffic in the quarter to be reported. Robust digital sales are anticipated to have aided ARCO's quarterly performance.

What Our Model Says for ARCO

Our proven model doesn’t conclusively predict an earnings beat for Arcos Dorados this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

ARCO’s Earnings ESP: Arcos Dorados has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank of ARCO: Arcos Dorados currently carries a Zacks Rank #4 (Sell).

Stocks With Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this reporting cycle:

CAVA Group, Inc. CAVA currently has an Earnings ESP of +3.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for EPS is pegged at 11 cents, which implies an increase of 83.3% from the prior-year actuals. The Zacks Consensus Estimate for quarterly revenues is pegged at $234.9 million, which indicates a rise of 33.8% from the year-earlier levels. CAVA has a trailing four-quarter earnings surprise of 257.7%, on average.

Ollie's Bargain OLLI currently has an Earnings ESP of +1.50% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly EPS of 57 cents implies an increase of 11.8% from the year-ago reported number.

The Zacks Consensus Estimate for quarterly revenues is pegged at $519 million, implying a jump of 8.1% from the prior-year quarter. OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.

Darden Restaurants, Inc. DRI currently has an Earnings ESP of +0.07% and a Zacks Rank #3. The Zacks Consensus Estimate for DRI’s quarterly revenues is pegged at $2.86 billion, which implies a rise of 4.9% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for DRI’s quarterly earnings has remained unchanged at $2.06 per share in the past 30 days, which indicates a 12% increase from the year-ago quarter’s reported number. DRI has a trailing four-quarter earnings surprise of 1.3%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Darden Restaurants, Inc. (DRI) : Free Stock Analysis Report

Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report

Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report

CAVA Group, Inc. (CAVA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research